Lowe's to Close Orchard Supply Hardware Stores

Lowe's will shutter all 99 of its Orchard Supply Hardware stores by February 2019 and refocus on its core home improvement business, the retailer announced on Wednesday.The company also will eliminate $500 million of planned capital projects and invest in high-velocity items while reducing the lower-performing SKUs in its inventory, according to a media release distributed prior to its second quarter 2018 earnings call.The distribution facility that services the Orchard Supply Hardware stores, which are located in California, Oregon and Florida, will close as well. The retailer's current fiscal year ends Feb. 1, 2019. The company plans to conduct store closing sales and has enlisted Hilco Merchant Services to help manage the process. The retailer purchased the Orchard Supply stores in 2013 to expand its presence in California and reach a new customer base through the addition of the smaller-format stores, which are located in densely populated areas. The Orchard Supply locations were operated as a separate standalone business from the standard Lowe's stores."Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe's' business outlook," chief executive officer Marvin Ellison said in the media release. "Our strategic reassessment is ongoing as we evaluate the productivity of our real estate portfolio and non-retail business investments."The store closures are the latest in a series of changes following Ellison's arrival in July from JCPenney. Lowe's has replaced most of its top leadership over the past month, and on Wednesday announced that CVS executive Dave Denton will replace retiring chief financial officer Marshall Croom."We are committed to driving even stronger performance in the future by sharpening our focus on retail fundamentals and by limiting any projects and initiatives that take us away from our core mission of being a great omnichannel home improvement retailer," Ellison said in the release.

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